Davy upgrades Green Reit forecast after strong full-year results

Stockbroker ‘significantly’ upgrades net asset value forecast of property group

Davy has "signficantly upgraded" its forecast for property investment group Green Reit after it recently recorded stronger than expected full-year figures.

The stockbroker, an adviser to Green Reit, said the group’s full-year net asset value (NAV) was about 7 cent above its original forecast. This it said was due to a number of factors including revaluation gains from two major developments, underlying estimated recovery value (ERV) growth, successful rent reviews and modest yield compression.

Davy upgraded its NAV forecasts by around 10 cent to €185.50 for 2019, and to €186.40 for the following two years.

The group has also upgraded its dividend payout ratio on the back of the sale of Westend Retail Park. It said it was now assuming a 100 per cent dividend payout ratio, leading to 1-2 per cent dividend upgrades.


“The stock trades on an 18 per cent discount to trailing net assets value, widening to 21 per cent this year. The full-year 2019 dividend yield is 4.6 per cent, which we forecast to grow to 5.2 per cent in full-year 2020,” Davy said.

“Both of these look very attractive relative to the sector given Green Reit’s superior risk/return profile,” it added.

Green Reit, which last month announced it had sold out of the retail sector with the sale of Westend Retail Park in Blanchardstown in west Dublin, recently announced full-year results for the year to June 30th, which showed that profits rose 11 per cent in the year, as the group benefited from a strong property market.

Pretax profits rose to €144.2 million as earnings per share rose 10 per cent to 20.8 cent. The company’s total portfolio value rose to €1.42 billion, up from €1.38 billion a year earlier.

During the period, rental income increased by 12.4 per cent to €67.9 million.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist